ACC 537 STUDY Extraordinary Success/acc537study.com ACC 537 STUDY Extraordinary Success/acc537study.c | Page 13

1. Issued a $10,000, 9% bond payable at par and gave as a bonus one
share of preferred stock, which at that time was selling for $106 a
share.
2. Issued 500 shares of common stock for equipment. The equipment
had been appraised at $7,100; the seller’s book value was $6,200. The
most recent market price of the common stock is $16 a share.
3. Issued 375 shares of common and 100 shares of preferred for a
lump sum amounting to $10,800. The common had been selling at $14
and the preferred at $65.
4. Issued 200 shares of common and 50 shares of preferred for
equipment. The common had a fair value of $16 per share; the
equipment has a fair value of $6,500.
Instructions Record the transactions listed above in journal entry
form.
E21-2(Lessee Computations and Entries; Capital Lease with
Guaranteed Residual Value) Pat Delaney Company leases an
automobile with a fair value of $8,725 from John Simon Motors, Inc.,
on the following terms:
1. Noncancelable term of 50 months.
2. Rental of $200 per month (at end of each month). (The present
value at 1% per month is $7,840.)3. Estimated residual value after 50
months is $1,180. (The present value at 1% per month is $715.)
Delaney Company guarantees the residual value of $1,180.4.
Estimated economic life of the automobile is 60 months.5. Delaney